Nigeria introduces circuit breaker as stocks hit 3.5-year low

Nigeria's share index fell to its lowest point since July 2012 on Monday.

LAGOS (Reuters) - Nigeria's share index fell to its lowest point since July 2012 on Monday, down 4.1 percent on the day with fund managers jittery over the central bank's inability to provide dollars for investors exiting the market.

The share index, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, has fallen for nine straight days, sliding below the psychologically important 23,000-point line to a level last seen on July 12, 2012.

Analysts the sell-off down to talk that foreign exchange auctions for offshore investors would now be held weekly. Foreign buyers accounted for 54 percent of trading volume, according to the Nigerian Stock Exchange data.

When the bourse's main indicator closed, it cumulated in year-to-date losses of 17.9 percent.

On Friday, the central bank's financial markets director said foreign exchange auctions would no longer be held daily. Four days earlier, the monetary authority had halted dollar sales to retail currency outlets.

"We don't sell (dollars) on a daily basis any more. When we do the auction, everybody bids," said Emmanuel Ukeje.

"Oil prices are expected to tank in coming weeks ...(and) heighten the supply glut in the market. That, coupled with (central bank) capital control measures, will keep (foreign portfolio investors) sitting on the sidelines or dumping Nigerian equities," United Capital said in a research note on Monday.

It told clients that corporate performance expectations for the 2015 financial year remain feeble and do not provide a basis for a market rebound.

The stock exchange has put a circuit breaker in place to halt trading if the main stock index drops 5 percent.

The index of Nigeria's top 10 banks .NGSEBNK10 declined by 1.64 percent, dragging the index lower.

Major decliners were Guinness Nigeria and the local unit of Lafarge Cement, both down 9.74 percent. Dangote Cement, which accounts for the third of the market capitalisation fell 7.07 percent.